Fiat Chrysler Will Pay $800 Million to Settle Emissions Cheating Claims

Ivan Schwartz
January 11, 2019

Following extensive negotiations, Fiat Chrysler Automobiles has reached a settlement with the Department of Justice, the Environmental Protection Agency, the State of California and an assortment of other entities over its "noncompliant diesel vehicles".

The Associated Press reported Wednesday that a multi-part agreement would include civil penalties of roughly $311 million paid to federal and California regulators, in addition to $280 million to compensate drivers and $72 million to settle claims brought by other US states.

According to the USA government, FCA used "illegal and undisclosed software" on 2014-2016 Ram 1500 and Jeep Grand Cherokee vehicles equipped with the 3.0-liter EcoDiesel V6 engine. Owners of such vehicles could get up to US$ 2,800 each. In what appears to be a carefully worded statement, the software tweaks will not affect "average fuel economy, drivability, durability or refinement" of the vehicles.

In a massive settlement Thursday that involves the Justice Department, the Environmental Protection Agency, and the state of California, Fiat Chrysler will adhere to a number of penalties for violating the Clean Air Act and California state law.

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The settlement comes nearly exactly two years since regulators first accused Fiat Chrysler of cheating on the tests.

The settlement is the second between the US government and an automaker over allegations of cheating on diesel emissions. The company has set aside more than $30 billion to cover costs and settlements, including $15 billion to buy back or fix vehicles in the U.S. FCA is one several manufacturers to use similar Bosch software that Volkswagen admitted in 2015 that it co-developed to cheat federal emissions tests. FCA failed to disclose the software during the process to become certified so the vehicles can be sold, according to the EPA. VW's tally is past $25 billion in the U.S. alone.

But Fiat Chrylser has always maintained that it did nothing wrong and that the software for its diesel vehicle engines is a legitimate way to meet emissions rules. The software turned off the pollution control system under extreme circumstances such as climbing mountains in order to prevent engine damage, which is allowed under federal regulations, FCA said.

At the time, FCA CEO Sergio Marchionne denied any wrongdoing and said the EPA was blowing the issue out of proportion.

Other reports by GizPress

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